Benchmarks continue firm trade in late morning session

Indian equity benchmarks continued to trade firm in late morning session on emergence of buying by funds and retail investors amid a firming trend in global markets after the US Federal Reserve took a dovish stance on monetary policy. Besides, strengthening of the rupee against the US dollar too supported the recovery. Sentiment on the street improved with the Organisation for Economic Cooperation and Development's (OECD) bullish outlook for India, which in its interim economic assessment report has said that India is poised to grow 7.7 percent this year and 8 percent in 2016 to become the fastest growing major economy. However, some investors remained cautious on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 457.43 crore on March 18, 2015.

After witnessing massive drubbing in previous session, Sensex and Nifty were now trading above the crucial 28,900 and 8,750 levels respectively, with gains of over 0.89%.  Apart from blue chips, broader indices too equally participated in the rally with both mid cap and small cap indices trading up by 0.81% and 0.84% respectively.  On global front, Asian equities outside Japan traded higher, taking cues from a strong rebound on Wall Street overnight as investors reacted to a dovish statement from the Federal Reserve. Further, the Fed said a rate hike in April is unlikely and although Fed Chair Janet Yellen said a June rate hike cannot be ruled out, a slight downgrade in the economic outlook means that tightening may pushed out until the second half of the year. Back home, Indian rupee appreciated by 34 paise to two-week high of 62.35 against the dollar in early trade after the American currency weakened overseas amidst sustained selling of the Greenback by exporters and banks.

Back on street, all the sectoral indices were trading in the positive territory with BSE Consumer Durables index leading the rally up 2.55% followed by Capital Goods, Metal and Infrastructure indices trading higher over a percentage point. In scrip specific development, Shares of Credit Analysis and Research (CARE) surged after the insurance giant Life Insurance Corporation of India (LIC) has acquired about 10% stake in the company for total consideration of Rs 418 crore through open market. Furthermore, Hester Biosciences is locked in upper circuit of 10% at Rs 488 after the company launched its PPR (Peste Des Petits Ruminants) vaccine and Goat Pox vaccine.

The market breadth on BSE was positive, out of 2446 stocks traded, 1442 stocks advanced, while 909 stocks declined on the BSE. 

The BSE Sensex is currently trading at 28901.41, up by 279.29 points or 0.98% after trading in a range of 28795.81 and 28978.74. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.81%, while Small cap index up by 0.84%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 2.55%, Capital Goods up by 1.55%, Metal up by 1.12%, infrastructure up by 0.91% and Bankex up by 0.85%, while there were no losers on the sectoral space.

The top gainers on the Sensex were Tata Steel up by 2.53%, GAIL India up by 2.44%, Axis Bank up by 2.26%, Larsen & Toubro up by 2.05% and Sun Pharma Inds. up by 2.00%. On the flip side, NTPC down by 1.05% and Infosys down by 0.01% were the top losers.

Meanwhile, the Organisation for Economic Cooperation and Development’s (OECD), in its interim economic assessment report has said that India is poised to grow 7.7 percent this year and 8 percent in 2016. OECD further stated that India is now expected to be the fastest-growing major economy in 2015-16, overtaking China, which is anticipated to expand 7 percent this year as well as next year.

Earlier in November last year, OECD had projected Indian economy to expand 6.4 percent and 6.6 percent in 2015 and 2016, respectively. It said that part of latest relative improvement reflects significant revisions to past GDP data, which raise the base growth rate through 2014.

According to the Paris-based think tank, low oil prices and monetary easing are boosting growth in the world's major economies, but the near-term pace of expansion remains modest, with abnormally low inflation and interest rates pointing to risks of financial instability and said that Governments cannot rely solely on low inflation and easy monetary policy to consolidate recovery and boost employment.

OECD has also cautioned that maintaining rapid growth would be a challenge for India despite the strong current momentum. The report further noted that “With obstacles emerging to the adoption of growth- friendly structural reforms, maintaining rapid growth will pose a difficult challenge, notwithstanding the strong current momentum.” It also said that central banks would continue to drive recovery but warned against an exclusive reliance on monetary policy.

The CNX Nifty is currently trading at 8763.00, up by 77.10 points or 0.89% after trading in a range of 8731.60 and 8788.20. There were 43 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were Lupin up by 3.03%, Asian Paints up by 2.57%, GAIL India up by 2.45%, Tata Steel up by 2.41% and Sun Pharma up by 2.19%. On the flip side, HCL Tech. down by 1.94%, Tech Mahindra down by 1.59%, NTPC down by 0.95%, Bank of Baroda down by 0.63% and Zee Entertainment down by 0.52% were the top losers.

Asian markets were trading mostly in the green; KOSPI Index increased 0.47%, Shanghai Composite rose 0.31%, FTSE Bursa Malaysia KLCI humped 0.54%, Straits Times gained 0.4%, Jakarta Composite advanced 0.65%, Taiwan Weighted surged 0.85% and Hang Seng was up by 1.28%. On the flip side, Nikkei 225 was down by 0.39%.